I have a small antique grand 5' that is in an even smaller living room 12' x13'. So that it wouldn't overwhelm the space I put it in the corner as you enter the room . So my book shelves and sofa are what is seen first. They are where your fireplace is. It works for me

I'd start with painting the fireplace wall a beautiful accent color. You've indicated that the photos are left from the previous owners, but if you like the reddish tones in the painting; this will give you an idea of paint color. Also the baby grand would look nice beside the fireplace. If you have the same sized sofa as it appears in the photo; this should be positioned in the center of the floor, letting your rug be the guide. The book shelves on the wall of the staircase (not underneath, but on the adjacent wall) Hope this helps! Good luck -Houzz -“Digital Imaging by Tina” www.brentsinteriorpainting.com

Will you light fires in there at all?

I don't think the room is small at all! If you're planning on putting a piano in there, maybe you can repurpose the couch somewhere else in your house and provide two chairs instead. Pull them away from the wall and it will look more spacious.

This thread is from 2/2013. Check dates as Houzz has a key word generator that pulls up old threads based on what you're reading.